1
SECURITY BENEFIT LIFE INSURANCE COMPANY
A MUTUAL COMPANY/FOUNDED IN 1892/TOPEKA, KS
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
THE COMPANY'S PROMISE
In consideration for the Purchase Payments and the attached application,
Security Benefit Life Insurance Company (the "Company") will pay the benefits of
this Contract according to its provisions.
LEGAL CONTRACT
PLEASE READ YOUR CONTRACT CAREFULLY. It is a legal Contract between the Owner
and the Company. The Contract's table of contents is on page 2.
FREE LOOK PERIOD-RIGHT TO CANCEL
IF FOR ANY REASON THE OWNER IS NOT SATISFIED WITH THIS CONTRACT, THE OWNER MAY
RETURN IT TO THE COMPANY WITHIN 10 DAYS FROM THE DATE OF RECEIPT. IT MAY BE
RETURNED BY DELIVERING OR MAILING IT TO THE COMPANY. IF RETURNED, THIS CONTRACT
SHALL BE DEEMED VOID FROM THE CONTRACT DATE. THE COMPANY WILL REFUND ANY
PURCHASE PAYMENTS MADE AND ALLOCATED TO THE FIXED ACCOUNT AND WILL REFUND
SEPARATE ACCOUNT CONTRACT VALUE AS OF THE DATE THE RETURNED POLICY IS RECEIVED
BY THE COMPANY.
Signed for Security Benefit Life Insurance Company on the Contract Date.
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Secretary President
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED GROUP UNALLOCATED VARIABLE ANNUITY CONTRACT.
*Purchase Payments may be made until termination of the Contract.
*This Contract is Participating.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
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FORM V6320 (2-97)
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TABLE OF CONTENTS
Page
CONTRACT SPECIFICATIONS ................................................ 3
DEFINITIONS ............................................................ 4-7
GENERAL PROVISIONS ..................................................... 7,8
The Contract ......................................................... 7
Compliance ........................................................... 7
Incontestability ..................................................... 7
Assignment ........................................................... 7
Transfers ............................................................ 7,8
Claims of Creditors .................................................. 8
Nonforfeiture Values ................................................. 8
Participation ........................................................ 8
Statements ........................................................... 8
OWNERSHIP PROVISIONS ................................................... 8,9
Ownership ............................................................ 8
Joint Ownership ...................................................... 9
Ownership Changes .................................................... 9
PURCHASE PAYMENT PROVISIONS ............................................ 9
Flexible Purchase Payments ........................................... 9
Purchase Payment Limitations ......................................... 9
Purchase Payment Allocation .......................................... 9
Place of Payment ..................................................... 9
CONTRACT VALUE AND EXPENSE PROVISIONS .................................. 10,11
Contract Value ....................................................... 10
Fixed Account Contract Value ......................................... 10
Fixed Account Interest Crediting ..................................... 10
Separate Account Contract Value ...................................... 10
Accumulation Unit Value .............................................. 10
Net Investment Factor ................................................ 11
Determining Accumulation Units ....................................... 11
Mortality and Expense Risk Charge .................................... 11
Premium Tax Expense .................................................. 11
Administration Charge ................................................ 11
Mutual Fund Expenses ................................................. 11
WITHDRAWAL PROVISIONS .................................................. 12,13
Withdrawals .......................................................... 12
Withdrawal Value ..................................................... 12
Withdrawal Charges ................................................... 12
Free Withdrawals ..................................................... 12
Systematic Withdrawals ............................................... 13
Free Systematic Withdrawals .......................................... 13
Date of Request ...................................................... 13
Payment of Withdrawal Benefits ....................................... 13
ANNUITY BENEFIT PROVISIONS ............................................. 14,15
Purchase of Annuity Benefit Provisions ............................... 14
Annuity Tables ....................................................... 14
Fixed Annuity Payments ............................................... 14
Variable Annuity Payments ............................................ 14
Alternate Annuity Option Rates ....................................... 14
Annuity Options ...................................................... 15
ANNUITY TABLES ......................................................... 16,17
AMENDMENTS OR ENDORSEMENTS, IF ANY
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VARIABLE ANNUITY CONTRACT SPECIFICATIONS
OWNER NAME: ▇▇▇▇ ▇ ▇▇▇ CONTRACT NUMBER: Specimen
JOINT OWNER NAME: ▇▇▇▇ ▇. ▇▇▇ CONTRACT DATE: 6-30-1997
PLAN: Qualified ISSUE DATE: 6-30-1997
ASSIGNEMENT: This policy may not be assigned.
See Assignment Provision of Your
Policy.
INITIAL PURCHASE PAYMENT $25,000
MINIMUM SUBSEQUENT PURCHASE PAYMENTS $500 ($50 pursuant to an automatic
investment program)
MINIMUM SYSTEMATIC WITHDRAWAL $100
MORTALITY AND EXPENSE RISK CHARGE 1.25% Annually
ADMINISTRATION CHARGE .15% Annually
WITHDRAWAL CHARGES:
Contract Year of Withdrawal 1 2 3 4 5 6 7+
Withdrawal Charge 6% 6% 5% 4% 3% 2% 0%
FREE WITHDRAWAL PERCENTAGE 10%
GUARANTEED RATE 3.00%
SUBACCOUNTS:
Money Market Subaccount
High Grade Income Subaccount
High Yield Subaccount
Global Aggressive Bond Subaccount
Growth-Income Subaccount
Equity Income Subaccount
Managed Asset Allocation Subaccount
Specialized Asset Allocation Subaccount
Growth Subaccount
Value Subaccount
Worldwide Equity Subaccount
Social Awareness Subaccount
Emerging Growth Subaccount
Small Cap Subaccount
METHOD FOR DEDUCTIONS:
Deductions for Premium Taxes, and any unallocated partial Withdrawals, including
Systematic Withdrawals, will be made sequentially from the Contract Value in
descending order of the Subaccounts listed above. The Fixed Account is the last
Account charged. The value of each Account will be depleted before the next is
charged.
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V6320 A (2-97)
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DEFINITIONS
ACCOUNT
An Account is one of the Subaccounts or the Fixed Account.
ACCUMULATION UNIT
The Accumulation Unit is a unit of measure. It is used to compute the Separate
Account Contract Value.
ANNUITANT
When Contract Value is distributed to a Participant and used to purchase an
annuity, the Annuitant is the person named by the Participant on whose life the
Annuity Payments depend for Annuity Options 1 through 4 and 8. The Annuitant
receives Annuity Payments under the Participant's Contract. Please see "Annuity
Benefit Provisions" on page 14.
ANNUITY OPTION
An Annuity Option is a set of provisions that form the basis for making Annuity
Payments. Please see "Annuity Options" on page 15.
AUTOMATIC INVESTMENT PROGRAM
A program pursuant to which Purchase Payments are automatically paid from the
Owner's bank account on a specified day of the month, on a monthly, quarterly,
semiannual or annual basis.
AUTOMATIC TRANSFERS
Automatic Transfers are Transfers among the Subaccounts and the Fixed Account.
Such Transfers are made automatically on a periodic basis by the Company at the
written request of the Owner. The Company reserves the right to discontinue,
modify or suspend Automatic Transfers.
COMPANY
The Company is Security Benefit Life Insurance Company, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
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CONTRACT ANNIVERSARY
A Contract Anniversary is a 12-month anniversary of the Contract Date.
CONTRACT DATE
The Contract Date is the date the Contract begins. The Contract Date is shown on
page 3.
CONTRACT YEAR
Contract Years are measured from the Contract Date.
CURRENT INTEREST
The Company may in its discretion pay Current Interest on the Fixed Account at a
rate that exceeds the Guaranteed Rate shown on page 3. The Company will declare
the rate of Current Interest, if any, from time to time.
FIXED ACCOUNT
The Fixed Account is part of the Company's general account. The Company manages
the general account and guarantees that it will credit interest on Fixed Account
Contract Value at an annual rate at least equal to the Guaranteed Rate. This
Rate is shown on page 3.
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V6320 B (2-97)
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DEFINITIONS (Continued)
GUARANTEE PERIOD
Current Interest, if declared, is fixed for rolling periods of one or more
years, referred to as Guarantee Periods. The Company may offer Guarantee Periods
of different durations. The Guarantee Period that applies to any Fixed Account
Contract Value: 1) starts on the date that such Contract Value is allocated to
the Fixed Account pursuant to: (a) a Purchase Payment Received by the Company;
or (b) a Transfer to the Fixed Account; and 2) ends on the last day of the same
month in the year in which the Guarantee Period expires. When any Guarantee
Period expires, a new Guarantee Period shall start for such Contract Value on
the date that follows such expiration date. Such period shall end on the
immediately preceding date in the year in which the Guarantee Period expires.
For example, assuming a one-year Guarantee Period, Contract Value transferred to
the Fixed Account on June 1 would have a Guarantee Period starting on that date
and ending on June 30 of the following year. A new Guarantee Period for such
Contract Value would start on July 1 of that year and end on June 30 of the
following year.
HOME OFFICE
The address of the Company's Home Office is Security Benefit Life Insurance
Company, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
ISSUE DATE
The Issue Date is the date the Company uses to determine the date the Contract
becomes incontestable. The Issue Date is shown on Page 3. Please see
"Incontestability" on page 7.
JOINT OWNER
The Joint Owner, if any, shares an undivided interest in the entire Contract
with the Owner. The Joint Owner, if any, is named on page 3. Please see "Joint
Ownership" provisions on page 9.
NONNATURAL PERSON
Any group or entity that is not a living person, such as a trust or corporation.
OWNER
The Owner is the person, group or entity that possesses all rights under the
Contract. The Owner is named on page 3. Please see "Ownership" provisions on
page 9.
PARTICIPANT
A Participant under the Plan.
PARTICIPANT'S CONTRACT
A Contract purchased with a Participant's distribution from the Plan.
PLAN
The employer-sponsored retirement plan, annuity purchase arrangement or deferred
compensation program for which the Contract is issued.
PREMIUM TAX
Any Premium Taxes levied by a state or other governmental entity will be charged
against this Contract. When Premium Tax is assessed after the Purchase Payment
is applied, it will be deducted as described on page 3.
PURCHASE PAYMENT
A Purchase Payment is money Received by the Company and applied to the Contract.
RECEIVED BY THE COMPANY
The phrase "Received by the Company" means receipt by the Company in good order
at its Home Office, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
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DEFINITIONS (Continued)
SEPARATE ACCOUNT
Variable Annuity Account VIII (the "Separate Account") is a separate account
established and maintained by the Company under Kansas law. The Separate Account
is registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 as a Unit Investment Trust. It was established by the
Company to support variable annuity contracts. The Company owns the assets of
the Separate Account and maintains them apart from the assets of its general
account and its other separate accounts. The assets held in the Separate Account
equal to the reserves and other Contract liabilities with respect to the
Separate Account may not be charged with liabilities arising from any other
business the Company may conduct.
Income and realized and unrealized gains and losses from assets in the Separate
Account are credited to, or charged against, the Separate Account without regard
to the income, gains or losses from the Company's general account or its other
separate accounts. The Separate Account is divided into Subaccounts shown on
page 3. Income and realized and unrealized gains and losses from assets in each
Subaccount are credited to, or charged against, the Subaccount without regard to
income, gains or losses in the other Subaccounts. The Company has the right to
transfer to its general account any assets of the Separate Account that are in
excess of the reserves and other Contract liabilities with respect to the
Separate Account. The value of the assets in the Separate Account on each
Valuation Date is determined at the end of each Valuation Date.
SUBACCOUNT NET ASSET VALUE
The Subaccount Net Asset Value is equal to: (1) the net asset value of all
shares of the underlying mutual fund held by the Subaccount; plus (2) any cash
or other assets; less (3) all liabilities of the Subaccount.
SUBACCOUNTS
The Separate Account is divided into Subaccounts which invest in shares of
mutual funds. Each Subaccount may invest its assets in a separate class or
series of a designated mutual fund or funds. The Subaccounts are shown on page
3. Subject to the regulatory requirements then in force, the Company reserves
the right to:
1. change or add designated mutual funds or other investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that are held or purchased
by the Separate Account or any Subaccount;
4. operate the Separate Account as a management investment company;
5. combine the assets of the Separate Account with other Separate Accounts of
the Company or an affiliate thereof;
6. restrict or eliminate any voting rights of the Owner with respect to the
Separate Account or other persons who have voting rights as to the Separate
Account; and
7. terminate and liquidate any Subaccount.
If any of these changes result in a material change to the Separate Account or a
Subaccount, the Company will notify the Owner of the change. The Company will
not change the investment policy of any Subaccount in any material respect
without complying with the filing and other procedures of the insurance
regulators of the state of issue.
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V6320 C (2-97)
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DEFINITIONS (Continued)
VALUATION DATE
A Valuation Date is each day the New York Stock Exchange and the Company's Home
Office are open for business.
VALUATION PERIOD
A Valuation Period is the interval of time from one Valuation Date to the next
Valuation Date.
GENERAL PROVISIONS
THE CONTRACT
The entire Contract between the Owner and the Company consists of this Contract,
the attached Application, and any Amendments, Endorsements or Riders to the
Contract. All statements made in the Application will, in the absence of fraud,
as ruled by a court of competent jurisdiction, be deemed representations and not
warranties. The Company will use no statement made by or on behalf of the Owner
to void this Contract unless it is in the written Application. Any change in the
Contract can be made only with the written consent of the President, a Vice
President, or the Secretary of the Company.
The Purchase Payment(s) and the Application must be acceptable to the Company
under its rules and practices. If they are not, the Company's liability shall be
limited to a return of the Purchase Payment(s).
COMPLIANCE
The Company reserves the right to make any change to the provisions of this
Contract to comply with or give the Owner the benefit of any federal or state
statute, rule or regulation. This includes, but is not limited to, requirements
for annuity contracts under the Internal Revenue Code or the laws of any state.
The Company will provide the Owner with a copy of any such change and will also
file such a change with the insurance regulatory officials of the state in which
the Contract is delivered.
INCONTESTABILITY
This Contract will not be contested after it has been in force for two years
from the Issue Date.
ASSIGNMENT
Please refer to page 3 to see if this Contract may be assigned. If it may be
assigned, no Assignment under this Contract is binding unless Received by the
Company in writing. The Company assumes no responsibility for the validity,
legality, or tax status of any Assignment. The Assignment will be subject to any
payment made or other action taken by the Company before the Assignment is
Received by the Company. Once filed, the rights of the Owner are subject to the
Assignment. Any claim is subject to proof of interest of the assignee.
TRANSFERS
The Owner may Transfer Contract Value among the Fixed Account and Subaccounts
subject to the following.
The Company reserves the right to: (1) limit the amount that may be subject to
Transfer to $1,000,000 per Transfer without Home Office approval; (2) limit the
number of Transfers allowed each Contract Year to 14; and (3) suspend Transfers.
Transfers must be at least $500.00 or, if less: (i) the remaining balance in a
Subaccount, or (ii) the amount of Fixed Account Contract Value the Guarantee
Period of which expires in the calendar month in which the Transfer is effected.
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GENERAL PROVISIONS (Continued)
TRANSFERS (Continued)
Contract Value may be transferred from the Fixed Account only: (1) during the
calendar month in which the applicable Guarantee Period expires; (2) pursuant to
an Automatic Transfer. Transfers of Fixed Account Contract Value shall be made:
(1) first from Fixed Account Contract Value for which the Guarantee Period
expires during the calendar month in which the Transfer is effected; (2) then in
the order that starts with Fixed Account Contract Value which has the longest
amount of time before its Guarantee Period expires; and (3) ends with that which
has the least amount of time before its Guarantee Period expires.
The Company will effect a Transfer to or from a Subaccount on the basis of
Accumulation Unit Value determined at the end of the Valuation Period in which
the Transfer is effected. The Company will effect a Transfer from the Fixed
Account on the basis of Fixed Account Contract Value as of the end of the
Valuation Period in which the Transfer is effected.
The Company reserves the right to delay Transfers from the Fixed Account for up
to 6 months as required by most states. The Company will notify you if there
will be a delay.
CLAIMS OF CREDITORS
The Contract Value and other benefits under this Contract are exempt from the
claims of creditors of the Owner to the extent allowed by law.
NONFORFEITURE VALUES
The Withdrawal Values will at least equal the minimum required by law.
PARTICIPATION
The Company is a mutual life insurance company. Therefore, it pays dividends on
some of its contracts. However, the Company does not expect dividends to become
payable on this Contract. At the end of each Contract Year the Company will
determine the Contract's dividend, if any. The Owner may choose to have it: (1)
added to the Contract Value; or (2) paid in cash. If no choice is made, any
dividend will be added to the Contract Value.
STATEMENTS
At least once each Contract Year the Owner shall be sent a statement including
the current Contract Value and any other information required by law. The Owner
may send a written request for a statement at other intervals. The Company may
charge a reasonable fee for such statements.
OWNERSHIP PROVISIONS
OWNERSHIP
All rights and privileges under the Contract may be exercised only by the Owner.
If the purchaser names someone other than himself or herself as Owner, the
purchaser has no rights in the Contract.
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V6320 D (2-97)
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OWNERSHIP PROVISIONS (Continued)
JOINT OWNERSHIP
If a Joint Owner is named in the application, then the Owner and Joint Owner
share an undivided interest in the entire Contract as joint tenants with rights
of survivorship. When an Owner and Joint Owner have been named, the Company will
honor only requests for changes and the exercise of other Ownership rights made
by both the Owner and Joint Owner. When a Joint Owner is named, all references
to "Owner" throughout this Contract should be construed to mean both the Owner
and Joint Owner, except for the "Statements" provision on page 8.
OWNERSHIP CHANGES
Subject to the terms of any existing Assignment, the Owner may name a new Owner.
Any new choice of Owner will revoke any prior choice. Any change must be made in
writing and recorded at the Home Office. The change will become effective as of
the date the written request is signed. The Company may require the Contract be
returned so these changes may be made.
PURCHASE PAYMENT PROVISIONS
FLEXIBLE PURCHASE PAYMENTS
The Contract becomes in force when the initial Purchase Payment is applied. The
Owner is not required to continue Purchase Payments in the amount or frequency
originally planned. The Owner may: (1) increase or decrease the amount of
Purchase Payments, subject to any Contract limits; or (2) change the frequency
of Purchase Payments. A change in frequency or amount of Purchase Payments does
not require a written request.
PURCHASE PAYMENT LIMITATIONS
Purchase Payments exceeding $1,000,000 will not be accepted without prior
approval by the Company. The Minimum Subsequent Purchase Payment amount is shown
on page 3.
PURCHASE PAYMENT ALLOCATION
Purchase Payments may be allocated among the Fixed Account and the Subaccounts.
Purchase Payments will be allocated according to the Owner's instructions in the
Application or more recent instructions, if any. Each allocation to the Fixed
Account and the Subaccounts must be at least 1% of the Purchase Payment. The
allocations must be whole percentage amounts and must total 100%. The Owner may
change the allocations by written notice to the Company.
PLACE OF PAYMENT
All Purchase Payments under this Contract are to be paid to the Company at its
Home Office. Purchase Payments after the initial Purchase Payment are applied as
of the end of the Valuation Period during which they are Received by the
Company.
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CONTRACT VALUE AND EXPENSE PROVISIONS
CONTRACT VALUE
On any Valuation Date, the Contract Value is the sum of: (1) the Separate
Account Contract Value; and (2) the Fixed Account Contract Value. At any time
after the first Contract Year, the Company reserves the right to pay to the
Owner the Contract Value as a lump sum if it is below $5,000.
FIXED ACCOUNT CONTRACT VALUE
On any Valuation Date, the Fixed Account Contract Value is equal to the first
Purchase Payment allocated under the Contract to the Fixed Account:
PLUS:
1. any other Purchase Payments allocated under the Contract to the Fixed
Account;
2. any Transfers from the Separate Account to the Fixed Account; and
3. any interest credited to the Fixed Account.
LESS:
1. any Withdrawals and applicable Withdrawal Charges deducted from the Fixed
Account;
2. any Transfers from the Fixed Account to the Separate Account; and
3. any applicable Premium Taxes.
FIXED ACCOUNT INTEREST CREDITING
The Company shall credit interest on Fixed Account Contract Value at an annual
rate at least equal to the Guaranteed Rate shown on page 3. Also, the Company
may in its sole judgment credit Current Interest at a rate in excess of the
Guaranteed Rate. The rate of Current Interest, if declared, shall be fixed
during the Guarantee Period. Fixed Account Contract Value shall earn Current
Interest during each Guarantee Period at the rate, if any, declared by the
Company on the first day of the Guarantee Period.
The Company may credit Current Interest on Contract Value that was allocated or
transferred to the Fixed Account during one period at a different rate than
amounts allocated or transferred to the Fixed Account in another period. Also,
the Company may credit Current Interest on Fixed Account Contract Value at
different rates based upon the length of the Guarantee Period. Therefore, at any
time, portions of Fixed Account Contract Value may be earning Current Interest
at different rates based upon the period during which such portions were
allocated or transferred to the Fixed Account and the length of the Guarantee
Period.
SEPARATE ACCOUNT CONTRACT VALUE
On any Valuation Date, the Separate Account Contract Value is the sum of the
then current value of the Accumulation Units allocated to each Subaccount for
this Contract.
ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Subaccount was set at $10. The
Accumulation Unit Value for any subsequent Valuation Date is equal to (1) times
(2) where:
1. is Accumulation Unit Value determined on the immediately preceding Valuation
Date; and
2. is the Net Investment Factor on the Valuation Date with respect to which
Accumulation Unit Value is being determined;
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V6320 E (2-97)
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
NET INVESTMENT FACTOR
The Net Investment Factor for any Subaccount as of the end of any Valuation
Period is determined by dividing (1) by (2) and subtracting (3) from the result,
where:
1. is equal to:
a. the net asset value per share of the mutual fund held in the Subaccount,
found as of the end of the current Valuation Period; plus
b. the per share amount of any dividend or capital gain distributions paid
by the Subaccount's underlying mutual fund that is not included in the
net asset value per share; plus or minus
c. a per share charge or credit for any taxes reserved for, which the
Company deems to have resulted from the operation of the Separate
Account or the Subaccounts; operations of the Company with respect to
the Contract; or the payment of premiums or acquisition costs under the
Contract.
2. is the net asset value per share of the Subaccount's underlying mutual fund
as of the end of the prior Valuation Period.
3. is a daily factor representing the Mortality and Expense Risk Charge and
Administration Charge which are deducted from the Separate Account.
Underlying mutual funds may declare dividends on a daily basis and pay such
dividends once a month. The Net Investment Factor allows for the monthly
reinvestment of these daily dividends. As described above, the gains and losses
from each Subaccount are credited to or charged against the Subaccounts without
regard to the gains or losses in the Company or other Subaccounts.
The Accumulation Unit Value may increase or decrease from one Valuation Period
to the next.
DETERMINING ACCUMULATION UNITS
The number of Accumulation Units allocated to a Subaccount under this Contract
is found by dividing: (1) the amount allocated to the Subaccount; by (2) the
Accumulation Unit Value for the Subaccount as of the end of the Valuation Period
during which the amount is applied under the Contract. The number of
Accumulation Units allocated to a Subaccount under the Contract will not change
as a result of investment experience. Events that change the number of
Accumulation Units are:
1. Purchase Payments that are applied to the Subaccount.
2. Contract Value that is Transferred into or out of the Subaccount.
3. Withdrawals and any applicable Withdrawal Charges that are deducted from the
Subaccount; and
4. Premium Taxes that are deducted from the Subaccount.
MORTALITY AND EXPENSE RISK CHARGE
The Company will deduct the Mortality and Expense Risk Charge shown on page 3.
This charge will be computed and deducted from each Subaccount on each Valuation
Date. This charge is factored into the Accumulation Unit Values on each
Valuation Date.
PREMIUM TAX EXPENSE
The Company reserves the right to deduct Premium Tax when due or any time
thereafter. Any applicable Premium Taxes will be allocated as described on page
3.
ADMINISTRATION CHARGE
The Company will deduct the Administration Charge shown on page 3. This charge
will be computed and deducted from each Subaccount on each Valuation Date. This
charge is factored into the Accumulation Unit Value on each Valuation Date.
MUTUAL FUND EXPENSES
Each Subaccount invests in shares of a mutual fund. The net asset value per
share of each underlying fund reflects the deduction of any investment advisory
and administration fees and other expenses of the fund. These fees and expenses
are not deducted from the assets of a Subaccount, but are paid by the underlying
funds. The Owner indirectly bears a pro rata share of such fees and expenses. An
underlying fund's fees and expenses are not specified or fixed under the terms
of this Contract.
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WITHDRAWAL PROVISIONS
WITHDRAWALS
A full or partial Withdrawal of Contract Value is allowed at any time. This
provision is subject to any federal or state Withdrawal restrictions.
Upon the Owner's request for a full Withdrawal, the Company will pay the
Withdrawal Value in a lump sum, and the Contract will terminate.
All Withdrawals must meet the following conditions.
1. The request for Withdrawal must be Received by the Company in writing or
under other methods allowed by the Company, if any.
2. The Owner must apply while this Contract is in force.
3. The amount Withdrawn must be at least $500.00 except that a Withdrawal of
less than $500.00 is allowed: (i) for Systematic Withdrawals, as discussed
on page 13, (ii) for Fixed Account Contract Value the Guarantee Period of
which expires during the calendar month of the Withdrawal, or (iii) when
terminating the Contract.
A partial Withdrawal request must state the allocations for deducting the
Withdrawal from each Account. If no allocation is specified, the partial
Withdrawal will be deducted from the Accounts in the order described on page 3,
"Method for Deductions." Withdrawals of Fixed Account Contract Value shall be
made: (1) first from Fixed Account Contract Value for which the Guarantee Period
expires during the calendar month in which the Withdrawal is effected; (2) then
in the order that starts with Fixed Account Contract Value which has the longest
amount of time before its Guarantee Period expires; and (3) ends with that which
has the least amount of time before its Guarantee Period expires.
WITHDRAWAL VALUE
The Withdrawal Value as of any Valuation Date will be: (1) the Contract Value on
that date; less (2) any Premium Taxes due or paid by the Company; and (3) any
Withdrawal Charges.
WITHDRAWAL CHARGES
If part or all of the Contract Value is Withdrawn, Withdrawal Charges may be
applied at the time of Withdrawal. The Withdrawal Charge is applied to Purchase
Payments withdrawn. The amount of the charge is based on the Contract Year in
which the Withdrawal is made. See the Withdrawal Charges shown on page 3. For
the purpose of determining the Withdrawal Charges, Purchase Payments are
withdrawn before Earnings. The Withdrawal Charge will not be assessed against:
1. any Free Withdrawal amounts;
2. any Free Systematic Withdrawal amounts;
3. any amounts remaining after all Purchase Payments are withdrawn;
The Withdrawal Charge will be assessed against Contract Value allocated to the
Subaccounts and the Fixed Account in the same proportion as the Withdrawal is
allocated.
FREE WITHDRAWALS
A Free Withdrawal is a Withdrawal amount that is not subject to Withdrawal
Charges. The amount of Free Withdrawal available in a Contract Year is
determined as follows. In the first Contract Year, it is equal to: (1)cumulative
Purchase Payments made under the Contract; times (2) the Free Withdrawal
Percentage set forth on page 3; less (3) any Free Withdrawals, including any
Free Systematic Withdrawals, made during the Contract Year. The amount of Free
Withdrawal available in subsequent Contract Years is equal to (1) Contract Value
as of the first day of the current Contract Year; times (2) the Free Withdrawal
Percentage; less (3) any Free Withdrawals, including any Free Systematic
Withdrawals, made during the Contract Year. Unused Free Withdrawal amounts are
not carried from one Contract Year to the next.
12
V6320 F (2-97)
13
WITHDRAWAL PROVISIONS (Continued)
SYSTEMATIC WITHDRAWALS
Systematic Withdrawals are automatic periodic Withdrawals from the Contract in
substantially equal amounts. In order to start Systematic Withdrawals, the Owner
must make the request in writing. Systematic Withdrawals are subject to any
applicable Withdrawal Charges, except as discussed under "Free Systematic
Withdrawals" below. The Minimum Systematic Withdrawal is shown on page 3. The
Owner must choose the type of payment and its frequency. The Systematic
Withdrawal request must state the allocations for deducting the Withdrawals from
each Account. If no allocation is specified, the Withdrawals will be deducted
from the Accounts in the order described on page 3, "Method for Deductions." The
payment type may be: (1) a percentage of Contract Value; (2) a specified dollar
amount; (3) all earnings in the Contract; (4) over a fixed period of time. The
payment frequency may be: (1) monthly; (2) quarterly; (3) semiannually; or (4)
annually. Systematic Withdrawals may be stopped or changed by the Owner upon
proper written request Received by the Company at least 30 days in advance of
the requested date of termination or change. The Company reserves the right to
stop, modify, suspend or charge a fee for Systematic Withdrawals at any time.
FREE SYSTEMATIC WITHDRAWALS
Free Systematic Withdrawals are not subject to a Withdrawal Charge. The amount
of Free Systematic Withdrawals available in a Contract Year is determined as
follows. The amount of Systematic Withdrawals that, when combined with any Free
Withdrawals in the current Contract Year, does not exceed the Free Withdrawal
amount available in that Contract Year.
DATE OF REQUEST
The Company will effect a Withdrawal of Separate Account Contract Value on the
basis of Accumulation Unit Value determined as of the end of the Valuation
Period in which all the required information is Received by the Company. The
Company will effect Systematic Withdrawals of Separate Account Contract Value on
the basis of Accumulation Unit Value determined as of the end of the Valuation
Period in which such Withdrawal is scheduled.
PAYMENT OF WITHDRAWAL BENEFITS
The Company reserves the right to suspend a Transfer or delay payment of a
Withdrawal from the Separate Account for any period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchang is restricted; or
3. when an emergency exists as a result of which: (a) disposal of securities
held in the Separate Account is not reasonably practicable; or (b) it is not
reasonably practicable to fairly value the net assets of the Separate
Account; or
4. during any other period when the Securitie and Exchange Commission, by
order, so permits to protect owners of securities.
Rules and regulations of the Securities and Exchange Commission will govern as
to whether the conditions set forth above exist.
The Company further reserves the right to delay payment of a Withdrawal from the
Fixed Account for up to six months as required by most states. The Company will
notify you if there will be a delay.
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14
ANNUITY BENEFIT PROVISIONS
PURCHASE OF ANNUITY BENEFIT PROVISIONS
The Company agrees to make available to any Participant under the Owner's Plan
who receives an eligible rollover distribution (or in the case of a Plan
described in Section 457 of the Internal Revenue Code, any distribution) from
the Plan, an annuity contract for purchase with such distribution. The Annuity
Contract will offer the annuity options and rates set forth below. A
Participant's purchase payment and application for such annuity contract must be
acceptable to the Company under its rules and practices and the provisions of
the contract applied for.
ANNUITY TABLES
Annuity Tables A through C show the guaranteed minimum amount of monthly Annuity
Payment per $1,000 applied, which for Annuity Options 1 through 4, 7 and 8
determine the amount of the first Variable Annuity Payment and the amount of
each Fixed Annuity Payment. The amount of each Annuity Payment for Annuity
Options 1 through 4, and 8 will depend on the Annuitant's sex and age.
Tables A through B assume 1900 as the year of birth of the Annuitant. To use
Tables A through B for an Annuitant born after 1900, the actual age is reduced
by 0.1 (one-tenth) of a year for each year the year of birth exceeds 1900. For
an Annuitant with a birth year prior to 1900, the actual age is increased in a
like manner. The actual age (in completed months) reduced or increased becomes
the "adjusted age of the Annuitant." The guaranteed payout rate is then found by
interpolating the Annuitant's adjusted age between the ages shown in Tables A
through B. Tables A through B are based on the 1983 Table "A" mortality table
and an interest rate of 3.5% per year. On request the Company will furnish the
amount of monthly Annuity Payment per $1,000 applied for any ages not shown.
For Annuity Options 5 through 7, annuity rates based on age and sex are not used
to calculate annuity payments. Annuity Payments for Options 5 and 6 are computed
without reference to the Annuity Tables.
FIXED ANNUITY PAYMENTS
With respect to Fixed Annuity Payments, the amounts shown on the Tables are the
guaranteed minimum for each Annuity Payment for Annuity Options 1 through 4, 7
and 8.
VARIABLE ANNUITY PAYMENTS
With respect to Variable Annuity Payments, the amounts shown on the Tables are
the guaranteed minimum first Annuity Payment, based on the assumed interest rate
of 3.5% for Annuity Options 1 through 4, 7 and 8. The amount of each Annuity
Payment after the first for these options is computed by means of Annuity Units.
ALTERNATE ANNUITY OPTION RATES
The Company may, at the time of election of an Annuity Option, offer more
favorable rates in lieu of the guaranteed rates shown in the Annuity Tables.
14
V6320 G (2-97)
15
ANNUITY PAYMENT PROVISIONS (Continued)
ANNUITY OPTIONS
OPTION 1
LIFE OPTION: This option provides payments for the life of the Annuitant. Table
A shows some of the guaranteed rates for this option.
OPTION 2
LIFE WITH FIXED PERIOD OPTION: This option provides payments for the life of the
Annuitant. A fixed period of 5, 10, 15 or 20 years may be chosen. Payments will
be made to the end of this period even if the Annuitant dies prior to the end of
the period. If the Annuitant dies before receiving all the payments during the
fixed period, the remaining payments will be made to the Designated Beneficiary.
Table A shows some of the guaranteed rates for this option.
OPTION 3
LIFE WITH INSTALLMENT OR UNIT REFUND OPTION: This option provides payments for
the life of the Annuitant, with a period certain determined by dividing the
Annuity Start Amount by the amount of the first payment. A fixed number of
payments will be made even if the Annuitant dies. If the Annuitant dies before
receiving the fixed number of payments, any remaining payments will be made to
the Designated Beneficiary. Table A shows some of the guaranteed rates for this
option.
OPTION 4
JOINT AND LAST SURVIVOR OPTION: This option provides payments for the life of
the Annuitant and Joint Annuitant. Payments will be made as long as either is
living. Table B shows some of the guaranteed rates for this option.
OPTION 5
FIXED PERIOD OPTION: This option provides payments for a fixed number of years
between 5 and 20. If the Contract Value is held in the Fixed Account, then the
amount of the payments will vary as a result of the interest rate (as adjusted
periodically) credited on the Fixed Account. This rate is guaranteed to be no
less than the Guaranteed Rate shown on page 3. If the Contract Value is held in
the Separate Account, then the amount of the payments will vary as a result of
the investment performance of the Subaccounts chosen. If all the Annuitants die
before receiving the fixed number of payments, any remaining payments will be
made to the Designated Beneficiary.
OPTION 6
FIXED PAYMENT OPTION: This option provides a fixed payment amount. This amount
is paid until the amount applied, including daily interest adjustments, is paid.
If the Contract Value is held in the Fixed Account, then the number of payments
will vary as a result of the interest rate (as adjusted periodically) credited
on the Fixed Account. This rate is guaranteed to be no less than the Guaranteed
Rate shown on page 3. If the Contract Value is held in the Separate Account,
then the number of payments will vary as a result of the investment performance
of the Subaccounts chosen. If all the Annuitants die before receiving all the
payments, any remaining payments will be made to the Designated Beneficiary.
OPTION 7
PERIOD CERTAIN OPTION: This option provides payments for a fixed period of 5,
10, 15 or 20 years. Payments will be made until the end of this period. If the
Annuitant dies prior to the end of the period, the remaining payments will be
made to the Designated Beneficiary. Table C shows some of the guaranteed rates
for this option.
OPTION 8
JOINT AND CONTINGENT SURVIVOR OPTION: This option provides payments for the life
of the primary Annuitant. Payments will be made to the primary Annuitant as long
as he or she is living. Upon the death of the primary Annuitant, payments will
be made to the contingent Annuitant as long as he or she is living. If the
contingent Annuitant is not living upon the death of the primary Annuitant, no
payments will be made to the contingent Annuitant. Table B shows some of the
guaranteed rates for this option.
15
16
ANNUITY TABLES
TABLE A
SETTLEMENT OPTIONS ONE, TWO, AND THREE
MINIMUM INITIAL MONTHLY INSTALLMENTS PER $1,000 OF AMOUNT APPLIED
Option Two
Adjusted Option One Life with Fixed Period Option Three
Age Life 5 10 15 20 Unit
of Annuitant Only Years Years Years Years Refund
--------------------------------------------------------------------------------
UNISEX
55 4.54 4.53 4.51 4.46 4.38 4.40
56 4.62 4.61 4.58 4.53 4.44 4.47
57 4.71 4.70 4.66 4.60 4.51 4.54
58 4.80 4.79 4.75 4.68 4.57 4.62
59 4.90 4.88 4.84 4.76 4.64 4.70
60 5.00 4.99 4.93 4.84 4.70 4.78
61 5.11 5.09 5.03 4.93 4.77 4.87
62 5.23 5.21 5.14 5.02 4.84 4.96
63 5.36 5.33 5.25 5.12 4.91 5.06
64 5.49 5.46 5.37 5.21 4.98 5.17
65 5.64 5.60 5.50 5.31 5.05 5.28
66 5.79 5.75 5.63 5.42 5.12 5.39
67 5.95 5.91 5.77 5.53 5.19 5.52
68 6.13 6.08 5.91 5.63 5.25 5.65
69 6.32 6.26 6.07 5.74 5.32 5.79
70 6.53 6.46 6.23 5.86 5.37 5.94
71 6.75 6.67 6.40 5.97 5.43 6.09
72 6.99 6.89 6.58 6.08 5.48 6.26
73 7.26 7.13 6.76 6.18 5.52 6.44
74 7.54 7.39 6.95 6.29 5.57 6.63
75 7.85 7.67 7.14 6.39 5.60 6.83
Values not shown will be provided upon request. Annual, semiannual, or quarterly
installments can be determined by multiplying the monthly installments by
11.812853, 5.9572227, and 2.9914196 respectively.
16
17
ANNUITY TABLES (Continued)
TABLE B
SETTLEMENT OPTIONS FOUR AND EIGHT
MINIMUM INITIAL MONTHLY INSTALLMENT PER $1,000 OF AMOUNT APPLIED
Adjusted Age of Adjusted Age of Male Annuitant
Female Annuitant 55 60 62 65 70 75
--------------------------------------------------------------------------------
55 4.16 4.27 4.30 4.35 4.42 4.47
60 4.34 4.51 4.57 4.66 4.78 4.86
62 4.41 4.61 4.68 4.79 4.94 5.04
65 4.51 4.76 4.85 4.99 5.20 5.35
70 4.66 4.99 5.13 5.34 5.67 5.95
75 4.78 5.19 5.37 5.66 6.16 6.63
Values not shown will be provided upon request. Annual, semiannual, or quarterly
installments can be determined by multiplying the monthly installments by
11.812853, 5.9572227, and 2.9914196 respectively.
TABLE C
SETTLEMENT OPTION SEVEN
MINIMUM INITIAL MONTHLY INSTALLMENT PER $1,000 OF AMOUNT APPLIED
PERIOD CERTAIN
5 YEARS 10 YEARS 15 YEARS 20 YEARS
--------------------------------------------------------------------------------
18.11 9.83 7.1 5.75
Values not shown will be provided upon request. Annual, semiannual, or quarterly
installments can be determined by multiplying the monthly installments by
11.812853, 5.9572227, and 2.9914196 respectively.
17
18
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until termination of the Contract.
* This Contract is Participating.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
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